Stocks Run Out of Gas

NEW YORK—Stocks stumbled, failing to break a losing streak, as the blue chips turned lower just ahead of the market's close.

The Dow Jones Industrial Average fell 19 points, or 0.1%, to 13326, to mark its fourth consecutive day of losses.

The Standard & Poor's 500-stock index was mostly flat, adding less than a point to 1433, and the Nasdaq Composite edged down two points, or 0.1%, to 3057. Apple Inc.AAPL-0.87% weighed on the tech-heavy Nasdaq, falling into correction territory.

The S&P 500 financial-company sector ticked up 0.5% ahead of a pair of large-bank earnings reports before Friday's opening bell. J.P. Morgan Chase Co.JPM-0.74%, due to report at 7 a.m. New York Time, gained after The Wall Street Journal reported its chief financial officer will step down. Wells Fargo Co.WFC-0.48% was down ahead of its 8 a.m. release.

"Earnings, guidance and revenue are going to be critical," said Stephen Wood, chief market strategist with Russell Investments, which oversees more than $150 billion in assets. "We are going to put revenue under a microscope and look at it very carefully."

Recent dour corporate news has led the Dow industrials to post their steepest slide in months. On Wednesday, warnings from industrials and energy heavyweights weighed on stocks, driving the average to its biggest loss since July.

"This earnings season has started off a little tepid," said Daniel McMahon, director of equity trading at Raymond James. "I think people are really waiting to see what happens."

An unexpectedly steep drop in jobless claims also stoked the rally at the market's open—but the Dow industrials' ensuing rise of more than 80 points was short-lived. The news wasn't as good as it initially appeared, as a Labor Department economist said one large state didn't report additional quarterly figures as expected, which accounted for a substantial part of the decrease.

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The trade deficit for August widened to $44.22 billion, compared with expectations of $44 billion, and import prices for September rose 1.1%.

European markets gained, with the Stoxx Europe 600 up 0.8%. Spain's IBEX 35 index was up 0.9%, after earlier losing as much as 1.3%, as some investors were hopeful that a downgrade of its credit rating by Standard & Poor's would push Spain to seek a bailout.

S&P cut Spain's rating two notches to triple-B-minus, the lowest investment-grade rating, citing mounting risks to the country's public finances as a result of rising economic and political pressures. S&P added that the central government's capacity to deal with its challenges is declining.

Asian markets were broadly lower on the back of U.S. losses on Wednesday and Spain's downgrade, with Japan's Nikkei Stock Average falling 0.6% and China's Shanghai Composite losing 0.8%. South Korea's Kospi Composite erased early gains to close down 0.8%, after the Bank of Korea cuts interest rates by 0.25 percentage points, as widely expected.

Front-month crude-oil futures climbed 0.9% to $92.07 a barrel, while front-month gold futures for October delivery gained 0.3% to $1,768.80 a troy ounce. The dollar lost ground against the euro but rose against the yen. Yields on the benchmark 10-year Treasury bond fell to 1.677%.

In other corporate news, shares of Sprint NextelS-1.75% surged after The Wall Street Journal reported that Japanese mobile carrier Softbank was in advanced talks to buy Sprint in a deal expected to be valued at more than one trillion yen, or about $12.8 billion.

A quartet of initial public offerings all got off to a strong start. Digital-image company Shutterstock jumped in its public-trading debut. Shares were priced at $17, well above the expected range.

In other earnings news, Safeway's earnings rose 21% in the third quarter from last year, but shares fell after the supermarket operator reported sales growth that fell short of expectations.

PrivateBancorp Inc.PVTB-0.93% reported third-quarter results that exceeded Wall Street expectations. Though it announced an offering of $75 million of its stock, the Chicago-based bank rose after being upgraded by two analysts.

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